Liberty Media has ramped up its bid to take control of satellite radio provider SiriusXM. On 30 May, the media giant filed a ‘petition for reconsideration of the dismissal’ with the FCC as it seeks to change the regulator’s mind over its request…
Liberty Media has ramped up its bid to take control of satellite radio provider SiriusXM. On 30 May, the media giant filed a ‘petition for reconsideration of the dismissal’ with the FCC as it seeks to change the regulator’s mind over its request for de facto control of SiriusXM.
In the petition Liberty stated that it intends to assert control over SiriusXM upon receiving FCC approval. To do so, Liberty indicated that it planned to convert almost one-half of its shares of B-1 Preferred Stock and seek to gain majority control of the SiriusXM board of directors. According to an SEC filing, Liberty now owns 46.2% of SiriusXM but has five of the thirteen SiriusXM board members.
In response, SiriusXM said that it had not received any notice from Liberty with regard to its plans to elect new board members and that a special meeting would need to be called by at least two board members or the chief executive to do so. SiriusXM added that no board members have yet called for such a meeting and the company’s annual general meeting is not until next year.
Liberty’s petition also notes that SiriusXM’s certificate of incorporation does not prohibit stockholders from acting by written consent and that “Liberty Media could, upon acquisition of sufficient shares, convert all of its preferred shares and act by written consent to replace the entire board of directors….”
SiriusXM stated that an action to remove and replace its entire board would require the consent of a majority of its outstanding common stock.
The satellite radio provider also revealed that it has been engaged in discussions with Liberty to explore possible transactions with respect to its ownership interest in SiriusXM, although no agreement with respect to a ‘specific transaction that would be mutually beneficial to both the common and preferred stockholders’ had been reached.
The move by Liberty is very much a response to the reasons the FCC gave at the beginning of May as to why it rejected the company’s request for de facto control. The basis of the dismissal was that Liberty had not shown that it intends to ‘take actions, such as conversion of preferred to common stock and installation of a board majority, that would constitute exercise of de facto or de jure control.’
